MADAN MOHAN SINGH versus VED PRAKASH ARYA on 5 March 2021

[2021] 2 S.C.R. 1060

SUPREME COURT REPORTS

[2021] 2 S.C.R.

MADAN MOHAN SINGH

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v.

VED PRAKASH ARYA

(Civil Appeal Nos. 814-815 of 2021)

B

MARCH 05, 2021

[ASHOK BHUSHAN AND R. SUBHASH REDDY, JJ.]

Eviction of unauthorised occupants – Appellant was allotteda booth – The allotment letter specifically provided that appellanthad no right to transfer his rights directly or indirectly and wasCalso restrained from subletting the booth – Appellant entered into apartnership deed dated 18.12.1976 with the respondent for carryingout the business of cycle repairing – However, later partnershipwas dissolved and respondent became an employee of the appellantin the booth – Dispute arose between the appellant and theDrespondent – Appellant sought possession of the booth – Respondenttook the defence that he was the tenant of the premises which waslet out to him in 18.12.1976 – The Chief Administrator in its orderdated 04.03.1986 had concluded that the respondent was a servantof the hirer/appellant – Held: The present is not a case whererespondent claimed any rent agreement – There was no rent receiptEfiled by the respondent in support of his claim of tenancy – Whenthere is no evidence of taking premises on rent and it is admitted byrespondent that he had not maintained any record of accounts ofpayment of rent, there is no base for holding that relationship oflandlord and tenant is proved – Thus, respondent had failed to proveFany documents pertaining to tenancy – One more fact to be noticedis that the defendant claimed his tenancy with effect from 18.12.1976– On 18.12.1976, admittedly partnership deed was signed both bythe plaintiff and defendant which was before the Court – When theparties signed a document and entered into a partnership deed,they cannot wish away the consequences which flow from the signingGof deed – The appellant having categorically denied the tenanacyand there being no evidence with regard to the tenancy, there is nodoubt in concluding that respondent was not a tenant of the premises– Clause 12 of the Allotment Letter prohibited the hirer from sublettingthe premises or any part thereof and decision of the ChiefHAdministrator was stated to be final in case of dispute – The finding of the Chief Administrator dated 04.03.1986 cannot be ignored –Therefore, the Estate Officer directed to put the appellant immediatelyin possession of the premises of Booth.

Allowing the appeals, the Court

HELD: 1. The categorical finding recorded by the trial courtis that the respondent-defendant failed to prove any documentspertaining to the tenancy. The tenancy is a relationship which iscreated between two parties. The agreement of tenancy can beboth by writing or oral. Even if there is oral agreement of tenancy,the Court has to look into the circumstances and intention of theparties and other material to conclude as to whether there wasany tenancy or not. The present is not a case where defendantclaimed any rent agreement. The defendant has come up with acase that he is paying rent at the rate of Rs.450/- per month.Defendant in his written statement has stated that appellant-plaintiff has never issued any rent receipt. Thus, present is not acase where there was any rent receipt filed by the defendant insupport of his claim of tenancy. [Para 17][1070-A-C]

2. When there is no evidence of taking premises on rentand it is admitted by DW-2/respondent that he had not maintainedany record of accounts of payment of rent, there is no base forholding that relationship of landlord and tenant is proved. Thetrial court itself has held that defendant had failed to prove anydocuments pertaining to tenancy. The First Appellate Court, thus,has rightly come to the conclusion that findings of the trial courtthat the respondent-defendant is a tenant is based on the surmisesand conjectures. [Para 19][1070-G-H]

3. One more fact to be noticed is that the defendant claimedhis tenancy with effect from 18.12.1976. On 18.12.1976, admittedlypartnership deed was signed both by the plaintiff and defendantwhich was before the Court. The defendant had not denied theexecution of partnership deed but he wanted to wish-away thepartnership deed saying that it was a sham document to save thehirer from rigours of clause 12 of the Allotment Order. When theparties signed a document and entered into a partnership deed,they cannot wish away the consequences which flow from the A

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Asigning of deed. The plaintiff having categorically denied thetenanacy and there being no evidence with regard to the tenancy,there is no error in the judgment of the First Appellate Courtthat defendant was not a tenant of the premises. [Para 20][1071-A-C]

B4. When Clause 12 of the Allotment Letter as noted aboveprohibits the hirer from subletting the premises or any partthereof, it is the decision of the Chief Administrator which shallbe binding on the parties. The relevant portion of Clause 12 inthis regard is “You will not sublet the premises or any part thereof.If there is any dispute as to whether the premises have beenCsublet or not the decision of the Chief Administrator, Chandigarh,on the point shall be binding on the parties”. As noted, ChiefAdministrator in its order dated 04.03.1986 which was passed inthe appeal filed by the defendant himself, has concluded that thedefendant (respondent herein) was a servant of the hirer. TheDsaid decision by clause 12 is final between the parties and it isnot open for the defendant to plead contrary to the above. Boththe trial court and the High Court have erred in not taking inconsideration Clause 12 and finding of the Chief Administratorin its order dated 04.03.1986. The finding of the ChiefAdministrator dated 04.03.1986 which was passed after the orderEof the Estate Officer cannot be wished away by the defendant norcan be ignored. [Para 21][1071-D-G]

C.M. Beena and Another v. P.N. Ramachandra Rao,2004 (3) SCC 595 : [2004] 3 SCR 306 – referred to.

Case Law ReferenceF

[2004] 3 SCR 306referred topara 18

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 814-815 of 2021

From the Judgment and Order dated 06.12.2018 of the High CourtGof Punjab and Haryana at Chandigarh in RSA No. 35 of 1997 and RSANo. 2610 of 2002.

P.S. Patwalia, Sr. Adv., Tushar Bakshi, Adv. for the Appellant.

Manoj Swarup, Sr. Adv., Mukul Kumar, Adv. for the Respondent.The Judgment of the Court was delivered by ASHOK BHUSHAN, J.

1. Leave granted.

2. These appeals have been filed by the appellant challenging thejudgment of the High Court of Punjab and Haryana dated 06.12.2018 bywhich Regular Second Appeal No.35 of 1997 filed by the respondent,the defendant in suit, has been allowed, and the Regular Second AppealNo.2610 of 2002 filed by the appellant has been dismissed and the suitsfiled by the plaintiff-appellant have been dismissed.

3. Brief facts of the case which are necessary to be noted are:

The appellant due to surrender of a temporary stall at Nehru Marketwas allotted Booth No.186 in Sector 35-D, Chandigarh vide AllotmentLetter dated 20.06.1972 issued by the Estate Officer, ChandigarhAdministration. The allotment specifically provided that appellant-plaintiffhas no right to transfer his rights directly or indirectly. The appellant wasrestrained from subletting the premises or any part thereof. The buildingwas leased out for cattle poultry feed and for no other purpose. Theappellant entered into a partnership deed dated 18.12.1976 with therespondent, Ved Prakash for carrying out the business of cycle repairingetc. in partnership at Booth No.186, Sector 35-D, Chandigarh. Theappellant’s case is that by notice dated 04.10.1979, the respondentdissolved the partnership and thereafter he became an employee of theappellant in the Booth.

4. The Estate Officer, Chandigarh passed an order dated09.09.1980/15.04.1982 terminating the hire-purchase agreement of theBooth on the ground that the premises are being used in contraventionof Allotment Letter dated 20.06.1972. The appellant filed an applicationbefore the Chief Administrator, Union Territory, Chandigarh questioningthe order dated 15.04.1982 praying that order be declared illegal andwrong. The respondent, Ved Prakash filed an application before theChief Administrator, in the proceedings claiming him to be occupier ofthe premises, paying that he may also be made party to the proceedings.By order dated 09.02.1984 passed under Public Premises (Eviction ofUnauthorised Occupants) Act, 1971, the Estate Officer directed evictionfrom Booth No.186. The appeal was filed by the respondent, Ved Prakashbefore the Additional District Judge, Chandigarh. In the aforesaid appeal A

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Athe appellant also appeared. The appeal was dismissed on 10.06.1985.However, the Appellate Court observed that Booth belonged to theappellant and the respondent, Ved Prakash was in possession as anemployee of the appellant.

5. The respondent, Ved Prakash has also filed Appeal No.21 ofB1984 challenging the order dated 09.09.1980 of the Estate Offider,Chandigarh issued on 15.04.1982 (cancelling the hire-purchaseagreement). The Chief Administrator, Chandigarh Administration decidedthe aforesaid appeal on 13.03.1986 where the Chief Administrator hasalso noticed that misuse of the premises has been stopped, hence, thepremises be restored to hirer-the appellant and the respondent-VedCPrakash was also held as servant of the hirer by the Chief Administrator.The respondent also filed Civil Writ Petition No.3115 of 1985 challengingthe order of eviction under the Public Premises Act which was dismissedas infructuous on 14.03.1986 by the High Court noticing that the orderof resumption has been revoked.

D6. The appellant being unable to take possession of the premises,he filed Civil Suit No.77 of 1986 impleading the respondent as soledefendant. The appellant’s case in the suit was that possession of BoothNo.186 was given to the respondent in pursuance of partnership deeddated 18.12.1976. It was pleaded that after restoration of the Booth byChief Administrator, Chandigarh dated 04.03.1986, the plaintiff-appellantEbecame owner of the property and it was further pleaded that therespondent after dissolution of the partnership has been allowed to usethe premises as an employee. By notice dated 17.02.1986 the servicesof the respondent-defendant have been terminated and the defendantwas requested to handover the vacant possession of the premises to theFplaintiff. However, the possession was never restored to the plaintiff tilldate, the plaintiff prayed for direction of mandatory injunction againstthe defendant directing the defendant to restore possession to the plaintiffof Booth No.186, Sector 35-D, Chandigarh.7. The defendant filed a written statement. In the written statement,the defendant pleaded that he took the premises on rent from the plaintiffGon 18.12.1976 at a monthly rent of Rs.450/- per month. The executionof partnership deed dated 18.12.1976 was admitted but it was claimedas sham document. It was further stated in para 2 of the writtenstatement (reply on merits) that plaintiff has never issued any receipt forthe rent and he has been refusing the rent from October, 1982. TheHdefendant claimed to be a tenant. The trial court vide its judgment dated 29.02.1992 dismissed the suit. The trial court held the defendant to be atenant notwithstanding the fact that defendant failed to prove anydocuments pertaining to the tenancy. The execution of partnership deeddated 18.12.1976 was accepted, however, the trial court observed thatthe said partnership deed was executed only to avoid the prohibition inhire purchase agreement.

8. Against the order of the trial court appeal was filed by theappellant. The First Appellate Court vide its judgment dated 02.12.1996allowed the appeal granted the decree of mandatory injunction to theappellant-plaintiff. The First Appellate Court held that there was nomaterial to come to the conclusion that defendant was tenant. The findingsof the trial court on the question of tenancy was held to be based onsurmises and conjectures. It was held that there was no presumption oflandlord and tenant. The First Appellate Court also noticed that therespondent, Ved Prakash appeared as DW-2 and stated that he hadmaintained accounts books in the business but there is no record regardingpayment to the appellant, accounts books were not produced in the Court.Against the judgment of the First Appellate Court, the Second Appealwas filed by the defendant which was allowed by the High Court byimpugned judgment dated 06.12.2018. The High Court framed followingtwo questions:

‘(i) Whether the court while adjudicating upon the dispute mustgo to the route of the case and unearth the evil design by liftingthe veil?

(ii) Whether the first appellate court, before setting aside ajudgment passed by the learned trial court, is required to analysethe reasons given by the learned trial court and after criticalappraisal thereof give its own reasons while disagreeing or settingaside the reasons given by the learned trial court?’

9. The High Court has held that the First Appellate Court wronglyrelied upon the order passed by the Chief Administrator. The High Courtfurther observed that the First Appellate Court also misread that beforethe Chief Administrator the defendant had taken a stand that he wasmerely a servant, which is against the record. The High Court has furtherobserved that the First Appellate Court has also drawn adverse inferenceon account of the non-production of the accounts books by the defendant.The High Court held that entire story put forth by the plaintiff does notappeal to the reason. A Regular Second Appeal No.2610 of 2002 was A

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Afiled by the plaintif against the judgment refusing to grant the mandatoryinjunction directing the defendant for not using the Booth for cyclerepairing. The appeal filed by the defendant was allowed setting asidethe decree of First Appellate Court. Aggrieved by the aforesaid judgments,these appeals have been filed by the plaintiff-appellant.B10. There is no dispute between the parties that Booth No.186was allotted to the plaintiff-appellant by order dated 20.06.1972. Thecondition Nos.12, 13 and 19 which are relevant for the present case areas follows:“12. You will have no right to transfer your rights under this leasedirectly or indirectly. You will not sublet the premises or any partCthereof. If there is any dispute as to whether the premises havebeen sublet or not the decision of the Chief Administrator,Chandigarh, on the point shall be binding on the parties, nofragmentation of the building be permissible.

13. The building shall be used only for the purpose it is leased outDcattle poultry feed and for no other purpose.

19. The undersigned shall have full rights, power and authority atall times to do through his officers or servants all acts and thingswhich may be necessary or expedient for the purpose of enforcingcompliance with all or any of the terms conditions and reservationsEherein contained and to recover from you the cost of doing anysuch act or thing.

11. It is also admitted that a partnership deed dated 18.12.1976was executed both by the plaintiff and the defendant under which deedit was decided and agreed mutually to carry out the business of cycleFrepairing etc. in Booth No.186. It is relevant to notice that the executionof partnership deed was not disputed by the defendant, Ved Prakash buthis case was that he took premises on rent at the rate of Rs.450/- permonth on 18.12.1976. The partnership document was termed as shamdocument by the defendant. In paragraph 2 of the plaint, the plaintiff hasmade pleading, which was replied in para 2 of the written statement,Gwhich are as follows:

“Para 2 of the Plaint: That after the taking possession of thesaid booth the plaintiff earlier started running business under thename and style of M/s Prakash Cycle Store in partnership withthe defendant and partnership deed was duly executed betweenHthe parties on 18.12.1976. Copy of the partnership deed is attached.

Para 2 of written statement: Para 2 of the plaint as stated iswrong and denied. It is stated that the defendant took the demisedPremises on rent from the plaintiff on the 18.12.1976 at a monthlyrent of Rs.450/- per month. The said partnership deed dated the18.12.1976 was executed. It was a sham document executed onlyto save the plaintiff from the rigours of clause 12 of the AllotmentOrder dated 20.06.1976 in favour of the plaintiff, which lays downthat in case of sub-tenancy the booth may be resumed. In fact,the execution of this partnership deed was one of the pre-conditionslaid down by the plaintiff for renting out the demised premises tothe defendant. Even since the 18.12.1976 the defendant has beenin exclusive possession as a tenant and has been paying rent atthe rate of Rs.450/- per month. The plaintiff has never issued anyreceipt for the rent received. The plaintiff has now been refusingrent since October, 1982.

12. As noted above, the premises was resumed by the EstateOfficer by order dated 09.09.1980 which was issued on 15.04.1982 onthe ground that premises is not being used for the purpose for which itwas granted but it was being used for cycle repairing. Against the orderdated 09.09.1980 the respondent himself filed an Appeal No.21 of 1984where the plaintiff-appellant had also appeared and claimed that thedefendant is only a servant of the plaintiff. The Chief Administratorallowed the appeal holding that misuse having stopped the allotment berestored to hirer, Madan Mohan Singh. The Chief Administrator alsoafter considering the arguments of the parties came to the conclusionthat Ved Prakash was a servant of the hirer. The relevant observationsof Chief Administrator are as follows:

“....At the outset the counsel for the appellant has stated that themisuse has been stopped and that the premises in question arenow being used for running a shop for the sale of poultry andcattle feed etc. The representative of the Estate Officer hasadmitted the factum of the removal of the misuse by the appellant.Sh. Kaushal has argued that the appellant has no locus standi forfiling this appeal because the appellant is merely a servant of thehirer Sh.Madan Mohan Singh. In support of his contention he hasproduced before me a copy of the judgment of the AdditionalDistt. Judge, Chandigarh who dismissed the appeal of Shri VedPrakash holding the view that the appellant was in possession ofthe said premises not as a tenant or licencee but only as an A

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Aemployee. …… The consideration of argument put forward bySh. Kaushal and that of the evidence adduced before me by himlead me to conclude that the appellant being a servant of the hirerhas no cause of action to agitate the impugned order. Leaving thismatter aside and adverting to the main issue involved in this case,I find that the misuse which was the basis for the passing of theBimpugned order has been removed and the booth is being used forthe purpose for which it was sold. I, therefore, do not find anyjustification to deprive the hirer of this booth to hold back thisproperty. In this back ground the allotment of the booth is restoredto its hirer Sh. Madan Mohan Singh. Since the booth had been putCto misuse the amount of forfeiture shall stand and should be paidwithin thirty days reckonable from the date of issue of this order.

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Announced in the presence of the parties.

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13. We may notice one more finding rendered by the AdditionalDistrict Judge in appeal filed by the respondent against the order passedfor eviction under the Public Premises (Eviction of UnauthorisedEOccupants) Act. The appeal was dismissed by the Additional DistrictJuge on 10.10.1985. However, in paragraph 4 the Additional DistrictJudge has made the following observation:

“4. I have heard and have perused the file. A perusal of the fileshows that the booth belonged to Shri Madan Mohan Singh. TheFsaid Madan Mohan Singh appeared before the Estate Officerand produced the record to show that the appellant was inpossession of the premises as his employee. This position wasfound to be true by the Estate Officer. Even thereafter a noticewas issued to Shri Ved Prakash which was served on him. Inappeal a copy of the original affidavit has been placed on the fileGby the landlord to show that the appellant agreed to work on thepremises as an employee on salary of Rs.320/- P.M. In view ofthe position it becomes clear that the appellant is not in possession of the premises in his own right either as a tenant or a licencee.Rather his possession is only as an employee.”

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14. We have noticed Clause 19 of the Allotment Order in which,it is the Estate Officer, Chandigarh Administration who has full rights,power and authority for the purpose of enforcing compliance with all orany of the terms, conditions of allotment dated 20.06.1972. It is furtherrelevant to note that Booth was resumed by the Estate Officer by orderdated 09.09.1980 (issued on 15.04.1982) on the ground of uses of thepremises not for cattle poultry feed but cycle/autorickshaws repairing.The Chief Administrator in his judgment dated 13.03.1986, which orderwas passed in appeal filed by the defendant against the resumption order,has observed after hearing the argument of hirer that the respondent isonly a servant of the hirer. The above observation and finding of theChief Administrator cannot be wished-away by the defendant asirrelevant. The High Court while referring to the order of the ChiefAdministrator has only observed that the Appellate Court has misreadthat defendant had taken a stand that he was merely a servant, which isagainst the record. When the Administrator has noted the case of theparties and came to the conclusion that defendant was a servant of thehirer, those findings cannot be said to be against the record. The specificfindings of the Chief Administrator are “The consideration of argumentput forward by Sh. Kaushal and that of the evidence adduced before meby him lead me to conclude that the appellant being a servant of the hirerhas no cause of action to agitate the impugned order”. Further the ChiefAdministrator has held that there is no justification to deprive the hirer ofthe Booth. In view of the order of Chief Administrator dated 13.03.1986,the appellant-plaintiff was clearly entitled to the possession and user ofthe Booth but when the possession was not handed over by the defendantto the appellant, he had to file the suit for mandatory injunction.

15. The defence which was taken by the defendant before thetrial court by filing written statement and by appearing in the evidencewas that he is a tenant of the premises which was let out to him on18.12.1976 at the rate of Rs.450/- per month.

16. We may first notice the finding of the trial court by which trialcourt held that defendant was tenant of the premises. The trial courtframed the Issue No.4, “whether the defendant is a tenant” ? The trialcourt while answering Issue No.4 recorded the following finding:

“Therefore, the defendant has to be held to be a tenant in respectof the booth in question notwithstanding the fact that the defendantfailed to prove any documents pertaining to the tenancy. Therefore, AB

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1070SUPREME COURT REPORTS

[2021] 2 S.C.R.

Athis issue is also decided in favour of the defendant and againstthe plaintiff.”

17. The categorical finding recorded by the trial court is that thedefendant failed to prove any documents pertaining to the tenancy. Thetenancy is a relationship which is created between two parties. TheBagreement of tenancy can be both by writing or oral. Even if there isoral agreement of tenancy, the Court has to look into the circumstancesand intention of the parties and other material to conclude as to whetherthere was any tenancy or not. The present is not a case where defendantclaimed any rent agreement. The defendant has come up with a casethat he is paying rent at the rate of Rs.450/- per month. Defendant in hisCwritten statement has stated that plaintiff has never issued any rent receipt.Thus, present is not a case where there was any rent receipt filed by thedefendant in support of his claim of tenancy. The defendant himselfappeared as DW-2. In cross-examination following statement was madeby DW-2:D

“No rent note was written in December, 1976 regarding booth inquestion. I have no receipt in my possession with regard to paymentof rent. I maintain books of account in the regular course of businesswith regard to the business being carried out in the shop. I cannotproduce the account books with regard to the business being doneEin the shop. I have not maintain any account with regard topayment of rent to the plaintiff. I have sent the rent by moneyorder to the plaintiff, but the plaintiff never received any moneyorder and I cannot produce any receipt of the money order videwhich the plaintiff would have accepted the rent with regard toFthe premises.”

18. This court had laid down in C.M. Beena and another vs.P.N. Ramachandra Rao, 2004 (3) SCC 595, that conduct of the partiesbefore and after the creation of relationship is relevant for finding outtheir intention.G

19. When there is no evidence of taking premises on rent and it isadmitted by DW-2 that he had not maintained any record of accounts ofpayment of rent, there is no base for holding that relationship of landlordand tenant is proved. The trial court itself has held that defendant hadfailed to prove any documents pertaining to tenancy. The First AppellateHCourt, thus, has rightly come to the conclusion that findings of the trial court that the defendant is a tenant is based on the surmises andconjectures.

20. One more fact to be noticed is that the defendant claimed histenancy with effect from 18.12.1976. On 18.12.1976, admittedlypartnership deed was signed both by the plaintiff and defendant whichwas before the Court. The defendant had not denied the execution ofpartnership deed but he wanted to wish-away the partnership deed sayingthat it was a sham document to save the hirer from rigours of clause 12of the Allotment Order. When the parties signed a document and enteredinto a partnership deed, they cannot wish away the consequences whichflow from the signing of deed. The plaintiff having categorically deniedthe tenanacy and there being no evidence with regard to the tenancy,we do not find any error in the judgment of the First Appellate Court thatdefendant was not a tenant of the premises. We do not find any error inthe judgment of the First Appellate Court holding that defendant was nota tenant of the premises.

21. When Clause 12 of the Allotment Letter as noted aboveprohibits the hirer from subletting the premises or any part thereof, it isthe decision of the Chief Administrator which shall be binding on theparties. The relevant portion of Clause 12 in this regard is “You will notsublet the premises or any part thereof. If there is any dispute as towhether the premises have been sublet or not the decision of the ChiefAdministrator, Chandigarh, on the point shall be binding on the parties”.As noted above, Chief Administrator in its order dated 04.03.1986 whichwas passed in the appeal filed by the defendant himself, has concludedthat the Ved Prakash-defendant (respondent herein) was a servant ofthe hirer. The said decision by clause 12 is final between the parties andit is not open for the defendant to plead contrary to the above. Both thetrial court and the High Court have erred in not taking in considerationClause 12 and finding of the Chief Administrator in its order dated04.03.1986. The finding of the Chief Administrator dated 04.03.1986which was passed after the order of the Estate Officer cannot be wishedaway by the defendant nor can be ignored while deciding the questionas to whether the premises were sublet to the defendant or not.

22. We may also notice that the High Court while deciding theRegular Second Appeal filed by the defendant has also decided RegularSecond Appeal filed by the appellant-plaintiff which arose from the SuitNo.77 of 1986 filed by the plaintiff seeking relief for permanent and A

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Amandatory injunction, restraining the defendant from using the BoothNo.186 for cycle repairs. The Regular Scond Appeal No.2610 of 2002filed by the plaintiff-appellant has also been dismissed. In view of ourdecision that Suit No.77 of 1986 filed by the appellant deserved to bedecreed and had rightly been decreed by the First Appellate Court, thejudgment of the High Court in RSA No.2610 of 2002 is of no avail.B

23. In view of the foregoing discussions, we allow these appealsand restore the judgment of the First Appellate Court dated 02.12.1996.The Estate Officer, Chandigarh Administration shall ensure that theappellant is immediately put in possession of the premises of BoothNo.186. It shall be open for the appellant to take appropriate proceedingsCto recover the damages and mesne profit for the use of premises by thedefendant. The appeals are allowed with costs.

Ankit Gyan

Appeals allowed.

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